UPDATE 2-Raytheon to keep next-generation jammer contract -U.S. Navy

By Andrea Shalal-Esa

WASHINGTON Jan 24 (Reuters) - The U.S. Navy on Friday said
it was sticking with Raytheon Co as prime contractor for
next-generation radar-jamming technology seen valued at billions
of dollars in coming years, despite a November ruling by the
U.S. Government Accountability Office (GAO) that upheld a
protest against the award.

Raytheon in July beat out BAE Systems and a team
comprised of Northrop Grumman Corp and Exelis Inc
to win the Navy contract for the jamming system.
The GAO in November backed a BAE challenge of
the contract, which was initially valued at $279 million but
could be worth many multiples of that over coming decades,
according to analysts

"The Navy has completed corrective action as recommended by
the GAO in the sustained protest filed by BAE Systems on the
Next Generation Jammer Technology Development contract," said
Navy spokeswoman Commander Thurraya Kent.

She said the Navy decided to stick with the Raytheon offer
after carrying out a new cost and technical analysis of all
three original bids, but gave no additional details.

The new jammer will replace the Northrop-built ALQ-99
tactical jamming system now used on the EA-18G Growler aircraft
built by Boeing Co. The jamming pods will enable U.S.
aircraft to render enemy radars useless.

"This confirms a huge breakthrough for Raytheon that
potentially could generate over $10 billion in additional
revenue during the next several decades," said Loren Thompson,
chief operating officer of the Lexington Institute think tank.

Thompson said he expected the program to survive the current
difficult budget environment given the U.S. military's need in
wartime to prevent adversaries from tracking aircraft,
communicating with ground forces or remotely detonating bombs.

It was not immediately clear if BAE or Northrop would
protest the Navy's decision to keep Raytheon on the contract.

No immediate comment was available from Raytheon.

BAE spokeswoman Kristin Gossel said her company was weighing
its options.

"We protested the award based on concerns with the Navy's
evaluation of our offering and our protest was sustained by the
GAO. We are disappointed with today's decision and are currently
considering all of our options," Gossel said.

Northrop, which had not protested the Navy's award to
Raytheon, said it was also disappointed by the decision.

"While we are disappointed, we remain committed to continue
to provide our warfighters with the lowest risk, most affordable
solutions," said Northrop spokesman Randy Belote.

When the GAO, the congressional agency that oversees federal
contract protests, ruled in favor of BAE in November, it said
the Navy had failed to reasonably evaluate the risk of the
proposals, improperly credited Raytheon with outdated
performance data, and did not adequately document its decision.